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Subsidy Removal: Petrol consumption now 48.43m litres as Nigeria moves to activate Natural Gas outlets

Compressed Natural Gas (CNG) Outlet Photo: Indian Auto

*The Nigerian Midstream and Downstream Petroleum Regulatory Authority reveals the average daily petrol consumption dropped from 66.9 million to 48.43 million litres June 2023, as seven banks are ready to manage revolving credit facility from the African Development Bank for mass rollout of Compressed Natural Gas (CNG) across the country

Isola Moses | ConsumerConnect

Latest figures from the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) otherwise known as the Authority, have indicated that the average daily petrol consumption in the country has fallen by 28 percent.

ConsumerConnect had reported President Bola Ahmed Tinubu announced  the stoppage of the controversial fuel subsidy regime in his inaugural address Monday, May 29, 2023, in Abuja, FCT, when he emphasised that “subsidy is gone.”

The Authority disclosed in the figures released to Reuters that the country’s average daily petrol consumption dropped to 48.43 million litres June 2023, down from the previous average of the hitherto much disputed 66.9 million litres.

Subsidy regime, fuel marketers and oil prices

The subsidy regime, prior to May 28, had kept prices cheap for decades, but it became increasingly expensive for the country, a report said.

The West African country also reportedly spent $10 billion subsidy 2022, leading to wider deficits and driving up government debt.

Before President Tinubu’s inauguration address and pronouncement to end subsidy payments, it was also learnt that a black market for smuggled Nigerian petroleum products, especially in neighbouring Cameroon, Benin and Togo had then collapsed.

Despite having spent $2.41 billion on the subsidy in the first five months in this year, the World Bank recently projected that Nigeria could save up to $5.10 billion this year from scrapping the petroleum subsidy and the ongoing Foreign Exchange (Forex) reforms.

Commenting on the observable reduction to 48.43 million litres daily petrol consumption, as released by the industry regulator, Billy Gillis-Harry, President of Petroleum Retail Outlet Owners Association of Nigeria (PETROAN), said his Association had developed a framework that could support the Nigerian Government to transparently and effortlessly collate adequate consumption data on petroleum consumption in the country, Leadership report noted.

Gillis-Harry, in a telephone conversation with the source, disclosed PETROAN also evolved the Petroleum Products Passport (PPP), a tool that can be perfectly deployed by the oil and gas industry to transparently monitor petroleum products supply and distribution across Nigeria.

The PETROAN President commended the present administration in the country for mustering the political will to exit the petrol subsidy regime.

He also urged the stakeholders to advance sustainable efforts at fixing the country’s oil refineries.

Banks’ deal with AfDB for mass rollout of Compressed Natural Gas to consumers

Report has indicated that the projected mass rollout of Compressed Natural Gas (CNG) to refilling outlets across all states of Nigeria is becoming a reality.

Seven banks have indicated readiness to manage revolving fund facility from the African Development Bank (AfDB) in this regard.

It was further learnt the Independent Petroleum Marketers Association of Nigeria (IPMAN) had equally sealed the deal with the continental lender (AfDB), following President Tinubu administration’s removal of petrol subsidy.

Elder Chinedu Okoronkwo, National President of IPMAN, who disclosed this development on phone, affirmed the Association made the approach after it conducted a market survey on the cost of converting existing petrol stations to CNG outlets across Nigeria.

Meanwhile, IPMAN has already commenced “identification of members interested in co-locating CNG dispensers and infrastructure on their existing petrol retail outlets,” report stated.

The ongoing exercise is to identify qualified potential candidates for the Bank’s loans to support its target of establishing 10-20 colocated CNG stations in each state in Nigeria during the first phase of its planned nationwide rollout of Compressed Natural Gas.

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